[grock74]

My wife an I bought a house belonging to my wife's parents and her uncle in may 2009 for full price of $75000. We obtained an HUD loan and now living in the house after fixing it up a little.We are first time home buyers making below $50000 per year with a disabled child and are going to file for the first time home buyers credit to help offset some of our debts. It has just recently come to my attention by reading into the IRS website that we CANNOT get this credit now because we bought a house that has belonged to my wife's family. Is this true? Are we screwed out of this credit now because we wanted to be closer to her family? There has got to be some loophole without having to break the law. We are not trying to get one over on the IRS we simply just want our slice of the pie. Andrew

[ebaines]

Unfortunately what you have discovered is correct - you do not qualify for the credit if you purchased the home from your wife's parents.

[grock74]

I don't get why it should matter who we purchased the house from and why was this VERY important stipulation was not made more aware to the public. Its very flusterating when your trying to scrape by and you get smacked down. Thank you ebaines for your answer.

[ebaines]

I understand your frustration. I suspect that the limitation was to ensure an "arms length" relationship between buyer and seller. If the limitation wasn't there you can imagine the collusion that could occur between related parties - buying and selling each other's homes merely to pocket the credit money.